This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

22 June 2012

CAB 053-12

Francis Maude, Minister for the Cabinet Office, today visited frontline staff who are transforming services at Hinchingbrooke Hospital. In February, Circle, a mutual joint venture which is 49% employee owned, became the first company to take over management of an NHS hospital and has since delivered significant improvements since the move in February 2012.

This government believes that mutual joint ventures can deliver public services more efficiently and more effectively. When staff are given the power to do their jobs in the way they know best standards can be improved as there’s a collective determination to improve things.

“We are watching with close interest as Circle continue their pioneering transformation of this hospital.

Ali Parsa, Chief Executive of Circle, said:

Hinchingbrooke Hospital was projected to make big losses and faced closure. Instead, by putting a partnership of healthcare professionals in charge, it is being transformed into one of the best district general hospitals in the country.

Since the takeover, we have transferred power to those closest to patients, and promoted 17 doctors to leadership roles so that clinicians now make up over 80% of the hospital board. Our model liberates the doctors and nurses at Hinchingbrooke to deliver the best services for the patients which they know best.

Across the country, mutuals already deliver about £1 billion of health services. The business models they choose vary greatly but all give employees a meaningful say in how things are run.

Notes to editors

1. About £1 billion of health services are provided by mutuals. Evidence suggests that employee ownership can boost productivity by up to 19%. John Lewis, one of Britain’s best known mutuals, continually tops customer satisfaction polls and has half the average staff turnover and sickness absence of the retail sector. The Government is supporting public servants who want to form mutuals with a £10million Mutuals Support Programme and Mutuals Information Service and hotline 0845 5390543.

2. Circle is a member of the government’s Mutual Pathfinder programme. These Pathfinders are trailblazers for the rest of the public sector - helping government establish, by learning from the front line, what type of support and structures will best enable the development of employee-led mutuals on an ongoing basis.

3. All Hinchingbrooke staff will be awarded staff shares in Circle later this year.

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